Are geographical indications a worthy quality label? a framework with endogenous quality choice

desquilbet, marion; sylvette monier-dilhan;

We analyse the effects of geographical indication labelling on quality choices and welfare in a vertical differentiation framework with two attributes of goods, gustatory quality and geographical origin. We investigate two extreme cases of the protected designation of origin (PDO) label: a denomination standard, which guarantees only the origin of the product without any requirement on production specifications, and a minimum quality requirement, which guarantees both the origin and the quality of the product.Wefind that as long thePDOgood is the high-quality good, binding production specifications on the quality level adversely affect the PDO producer(s).